MONEY MARKET INSTRUMENTS --

1. Treasury Bills (T-Bills): Treasury Bills are one of the safest money market instruments as they are issued by CentralGovernment. At present, the Government of India issues three types of treasury bills through auctions, namely, 91-day,182-day and 364-day. There are no treasury bills issued by State Governments.Amount: Treasury bills are available for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000. Treasury billsare issued at a discount and are redeemed at par

2. Commercial Paper (CP) - Commercial Paper (CP) is an unsecured money market instrument issued in the form of apromissory note.Who can issue CP - Corporates, primary dealers (PDs) and the All-India Financial Institutions (FIs) are eligible to issue CP.Minimum and maximum period of maturity for CP: CP can beissued for maturities between a minimum of 7 days and a maximumof up to one year from the date of issue. However, the maturity dateof the CP should not go beyond the date up to which the creditrating of the issuer is valid.In what denominations a CP that can be issued: CP can be issuedin denominations of Rs.5 lakh or multiples thereof.Who can invest in CP: Individuals, banking companies, other corporate bodies (registered or incorporated in India) andunincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs) etc. can invest in CPs.

3. Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialised form or as a UsancePromissory Note against funds deposited at a bank or other eligible financial institution for a specified time period.Who can issue CD: CDs can be issued by (i) scheduled commercial banks {excluding Regional Rural Banks and Local AreaBanks}; and (ii) select All-India Financial Institutions (FIs) that have been permitted by RBI to raise short-term resourceswithin the umbrella limit fixed by RBI.Minimum and maximum period of maturity for CD: The maturity period of CDs issued by banks should not be less than7 days and not more than one year, from the date of issue.Note: The FIs (Financial Institutions) can issue CDs for a period not less than 1 year and not exceeding 3 years from thedate of issue.Minimum Size of Issue and Denominations: Minimum amount of a CD should be Rs.1 lakh, i.e., the minimum depositthat could be accepted from a single subscriber should not be less than Rs.1 lakh, and in multiples of Rs. 1 lakh thereafter.

4. Repurchase Agreements (Repo): Repurchase Agreements which are also called as Repo or Reverse Repo are short termloans that buyers and sellers agree upon for selling and repurchasing. Repo or Reverse Repo transactions can be done onlybetween the parties approved by RBI and allowed only between RBI-approved securities such as state and centralgovernment securities, T-Bills, PSU bonds and corporate bonds. They are usually used for overnight borrowing.

5. Banker's Acceptance: Banker's Acceptance is like a short term investment plan created by non-financial firm, backed by aguarantee from the bank. It's like a bill of exchange stating a buyer's promise to pay to the seller a certain specified amountat a certain date. And, the bank guarantees that the buyer will pay the seller at a future date. Firm with strong credit ratingcan draw such bill. These securities come with the maturities between 30 and 180 days and the most common term forthese instruments is 90 days.